The Wall Street Journal published an article on banks denying credit to homeowners who rent rooms or apartments from their primary residence. If you advertise a room or portion of your primary residence and have or want a credit line on your house, it might be worth your while to have a chat with your banker.
It doesn’t really make sense. If a homeowner gains additional income by renting a portion of their property, that homeowner should present a lower risk profile to the bank. Many homeowners who rent may eventually apply for refinancing, a home equity loan, or a mortgage. These days, the mortgage banks are questioning whether the rental income changes the category of the home from a primary residence to an investment property or a commercial business. On this basis many are being turned down on their loan requests.
If you haven’t yet decided whether to rent out, you may want to check with your banker first.